Ticketmaster Will Pay $10 Million to Put Songkick Criminal Case to Rest
Ticketmaster has agreed to pay a $ 10 million fine to clear the charges that infiltrated one of its competitors’ computer systems, prosecutors said Wednesday. called Songkick.
More than two years ago, Ticketmaster reached an agreement with Songkick in response to a lawsuit accusing the concert giant of abusing its market power to control ticket sales. In addition to purchasing $ 110 million, Ticketmaster also acquired some of Songkick’s remaining technology assets and patents for an undisclosed sum.
The legal battle also included allegations of corporate espionage, which led to an investigation by the federal prosecutor’s office in New York.
Prosecutors for the US law firm for the Eastern District of New York said in court documents that the computer interventions were led by a former Songkick employee who left the startup in 2012 and later worked at Ticketmaster, owned by Live Nation. The employee allegedly passed on Songkick’s credentials to other Ticketmaster employees so that they can access an app called Artist Toolbox, which provides data on how to purchase pre-sale tickets through Songkick.
The employee was also accused of sharing URLs that led to Songkick’s ticketing website drafts. In response to this information, prosecutors said a Ticketmaster executive wrote that the goal was to “smother” its competitor and “steal” one of Songkick’s key customers.
The details of the criminal investigation became known in federal court in Brooklyn where Ticketmaster officially agreed to pay the fine on Wednesday under a deferred law enforcement arrangement, according to a press release from the US law firm.
In a statement on Wednesday, Ticketmaster announced that in 2017 the employee who provided the credentials and another Ticketmaster employee, Zeeshan Zaidi, who had also accessed the computer systems and faced separate fees, had been fired.
“Your actions violated our company guidelines and contradicted our values,” said the statement. “We are pleased that this matter is now resolved.”
Last year, Mr. Zaidi, who was formerly Head of Artist Services at Ticketmaster, pleaded guilty to conspirating computer intrusion and cable fraud related to the case. Court files from the US law firm said Mr. Zaidi had “multiple” accessed Songkick’s computer systems between 2013 and 2015. Mr. Zaidi also included screenshots of Songkick’s Toolbox for Artists in an executive presentation and asked for “confidential proprietary information” about Songkick from the employee who worked there, the files said.
One of Mr. Zaidi’s attorneys awaiting conviction did not immediately respond to a request for comment.
The criminal charges filed against Ticketmaster on Wednesday include a number of computer intrusions for commercial gain and a number of cable fraud. To comply with the deferred law enforcement agreement, Ticketmaster must maintain an ethics program to prevent similar violations in the future.
The $ 10 million fine isn’t a huge sum for a billion-dollar company, but the pandemic has already put Live Nation under significant financial pressure as it had to cancel concerts en masse and respond to a flurry of reimbursement requests.